Renewable law leaves the gate

An observer peers up at one of the 1.5 megawatt wind
turbines at the wind farm just south of Lamar, Colorado, that
supplies energy to Xcel

Matthew Staver

When Colorado voters approved Amendment 37 in 2004,
most had no idea how long it would take for the state’s
renewable standards to go into effect.

More than a year
later, the state’s Public Utilities Commission finally
released the rules implementing the law, which requires the
state’s largest utilities to generate 10 percent of their
electricity from renewable sources by 2015.

The original
law, as passed by voters, would have required power companies Xcel
Energy and Aquila, two municipal utilities, and three rural
electrical cooperatives to rely increasingly on wind, solar,
biomass, geothermal and some hydropower (HCN, 5/2/05: The Winds of
Change). All told, it would have applied to more than 2.2 million
customers in the state.

But even before the PUC released
the rules in mid-December, two rural cooperatives exempted
themselves from the law through a vote of their members.
Intermountain Rural Electric Association and its 127,000 members in
central Colorado opted out last spring; this fall, United Power and
its 56,000 members along the Front Range did the same. "We looked
at the voting results (for the standard) in our region, and it was
pretty split," says Heidi Stortz, United’s marketing and
communication coordinator. She says that when the board of
directors took a "fiscal look" at the law and found unanswered
questions, it recommended that its members vote to opt out.

"That’s not exactly a fair and balanced approach to
getting the word out," says Ken Regelson, a Boulder-based
sustainable energy consultant. But Regelson does see cause for
hope: Colorado Springs Utilities plans to offer solar rebates, and,
as of Jan. 1, Xcel Energy, the state’s largest utility, has
implemented a solar rebate. Customers with small photovoltaic
systems receive rebates; any excess energy they produce is credited
to their next month’s bill.

For the second year in
a row, Xcel has also announced new programs to add more renewable
sources to its portfolio. Last January, the company said it would
seek 400 megawatts of new wind projects by the end of 2005. But the
company added only 60 megawatts of wind power, bringing its total
wind capacity to 282 megawatts — enough to power between
112,800 and 282,000 homes (HCN, 12/12/05: Forget idealism).

"The developers could not find financing, turbines were
unavailable, and they were unable to meet the conditions of our
contract," says Xcel spokesman Mark Stutz. Aggravating
circumstances, says Stutz, is the erratic manner in which Congress
extends the federal production tax credit for wind projects. Wind
developers get a 1.8 cent per kilowatt hour tax credit, but because
Congress typically establishes the credit for a year or two at a
time, it must be renewed periodically — and its impending
expiration has halted many a wind project.

Now that
Congress has renewed the tax credit until the end of 2007, Xcel has
released a proposal for 775 megawatts of new wind projects. "When
all this power comes online, we’ll reach the state renewable
standard through 2014," says Stutz, "and Colorado will be in the
top five states for wind production."